1 in 4 Americans Have a Bad Credit Score

Millions of Americans credit scores are dropping to new lows. New numbers supplied by FICO Inc. show that 25.5% of consumers - about 43.4 million people have a credit score of 599 or below. Consumers with credit scores in this range will find it difficult to get credit cards, auto loans and mortgages under the tougher lending standards.

Credit Scores Below 599

FICO's latest analysis is based on consumer credit reports as of April. Its findings represent an increase of about 2.4 million people in the lowest credit score categories in the past two years. FICO reports that historically just 15% of the 170 million consumers with active credit accounts, or 25.5 million people, fell below the 599. In 2008, 24.1% of Americans had scores in that range.

The decline in FICO scores over the past 3 years can be attributed to the recession which drove the housing crash and the credit crunch that many consumers and small business face. Over the past few years, millions of Americans have defaulted on their debts because they lost their jobs and have taken on than they could afford. The Labor Department says about 26 million people are out of work or underemployed, and millions more face foreclosure, which alone can drop 150 points off ones credit score.

One group that may feel the effects of the tighter lending standards is those with scores between 650 and 699. The new data shows that this group comprised 11.9 percent of scores. This is down from 12 percent in 2008, but reflects a drop of roughly 5.3 million people from its historical average of 15 percent.

Credit Score Range

If your credit score is below 600 you likely have serious negative items affecting your credit score like a bankruptcy or many late payments by more than 90 days. FICO scores range from 300 to 850. Credit scores between 700 and 800 are the most attractive and can often reduce your interest rates and fees. Any score under 620 is considered high risk and often called "subprime." The higher your score, the more likely you are to be seen by creditors as a good risk. The score that a lender will accept depends on the type of loan you?re applying for.

The good news is that no matter what your score you can always do things to boost it. It is essential that your credit report is accurate. Request and carefully review your credit reports from each of the three major credit reporting agencies - Equifax, Experian and TransUnion for inaccuracies. If you notice any omissions, inaccurate or outdated information you should immediately dispute it with the agency reporting that information. Catching a bad mistake can boost your score significantly.

If you are suffering with less than perfect credit, the Complete System to Repair Your Credit and Boost Your Credit Score can help you get your credit on the right track. Download Today!